Paying yourself - how much?

[kelsey]

Hi all,

 

First time poster. Just curious - how do you all work out how much to pay yourselves? Are you worried about taking too much and it affecting your company?

[jfc]

Hi all,
 
First time poster. Just curious - how do you all work out how much to pay yourselves? Are you worried about taking too much and it affecting your company?

Depends on your business set up how long you've been trading etc. I'm now a limited company so can take a small salary £8k a year then take the remainder in dividend from the business profits. As a Ltd I cant help myself to money in the same way a sole trader can. If you are sole trader you can take as much as you like, but make sure you leave enough to pay you tax and NI and pre paid tax at the end of the year!

[Steve Bullman]

23 minutes ago, jfc said:

2 hours ago, kelsey said:

Hi all,
 
First time poster. Just curious - how do you all work out how much to pay yourselves? Are you worried about taking too much and it affecting your company?

Depends on your business set up how long you've been trading etc. I'm now a limited company so can take a small salary £8k a year then take the remainder in dividend from the business profits. As a Ltd I cant help myself to money in the same way a sole trader can. If you are sole trader you can take as much as you like, but make sure you leave enough to pay you tax and NI and pre paid tax at the end of the year!

Why 8k and not the full 11k allowance or whatever it is now?

[jfc]

Thats what my accountant recommended. I think you have to pay ni on anything higher.

[Rich Rule]

4 minutes ago, jfc said:

Thats what my accountant recommended. I think you have to pay ni on anything higher.

 It how does that work when you appy for personal finance or a mortgage?

 

Making it look like you earn f’all is good for some things and not others.

[Steve Bullman]

Just now, Rich Rule said:

 It how does that work when you appy for personal finance or a mortgage?

 

Making it look like you earn f’all is good for some things and not others.

Theres brokers out there that know the game when it comes to limited companies Rich, and will look at your business income rather than take home pay, at least that what my Mortgage advisor told me. I took out my mortgage just before going limited so it wasn't an issue at the time.

[topchippyles]

I think everyone will have a different point of view on this question. 

[jfc]

 It how does that work when you appy for personal finance or a mortgage?
 
Making it look like you earn f’all is good for some things and not others.

Hi rich, like Steve says it's about income not salary.

I'm over 50 now and have a good credit history. Not really looking for another mortgage or finance.

Best set up is dependent on circumstances.

[Eddie Eco]

I’m limited and set up thus way and just got a mortgage in the last few years. We needed to show SA302 (final personal tax return) that shows all earnings, base salary and dividend so wasn’t an issue. Only thing is we needed to show the last two years worth, as opposed to one of the guys who works for me who was good to go with his deposit and three months payslips! 

[kelsey]

Ah, makes sense.

 

I wasn't talking about in a tax sense, more how do you work out the amount that you can afford do pay yourself?

 

Do you just take bits as you need it?

Do you take it when you have bills to pay?

Do you have a set amount you like to pay yourself every month?